Clarificatory exemption notification applied from inception, securing excise duty relief under the original notification scheme.

An amending exemption notification was treated as clarificatory rather than prospective, so it operated to explain the original excise exemption scheme and to reflect the Government's intention from the outset. On that basis, the denial of exemption for the period before the amendment could not be sustained, and the assessee was held entitled to the benefit of the original notification read with the amendment from its inception.

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Issues: Whether the assessee was entitled to exemption from excise duty under Notification No. 122/86 dated 1-3-1986, as clarified by amended Notification No. 455/86 dated 21-11-1986, with effect from the inception of the original notification.

Analysis: The exemption claimed for the disputed products had been denied on the view that the amending notification was prospective. The Tribunal followed its earlier decision on the same notification scheme and held that the amendment was clarificatory in nature and reflected the Government's intention to grant the exemption from the beginning of the original notification. On that basis, the denial of exemption for the period prior to 21-11-1986 could not be sustained.

Conclusion: The assessee was entitled to the benefit of Notification No. 122/86 dated 1-3-1986 read with Notification No. 455/86 dated 21-11-1986 from 1-3-1986, and the denial of exemption was set aside in favour of the assessee.

Ratio Decidendi: Where an amending exemption notification is held to be clarificatory, it operates to explain the original notification and grants the intended exemption from its inception.

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